Whenever any new tax is introduced, there's always the risk of crazy inflation – that retailers – only too eager to cream a little off the top will pass on the tax increase and then some to consumers who have really not many alternatives. And some say that's how it's been happening with the increase in General Sales Tax – which has forced the Dept. of GST and the Belize Bureau of Standards to conduct visits to retial outlets to ensure that the new rate is being fairly applied and that zero rated items are properly marked down. We accompanied them on one of those visits today.

Jim McFadzean Reporting,
Almost one month after it came into effect, the 2.5 percent additional tax on consumer goods is still proving a thorn in the side of both consumers and retailers. The government agencies charged with the implementation and enforcement remain short of manpower and resources, and so trying to get the bugs out of the system is proving to be quite a job.

Martin Rivas, GST Officer
"So far since yesterday we have had problems with the tax receipts. They are not properly structured. Because as a consumer when you come in to buy, you need to know what is taxable and what is not. So that is what we are enforcing, that the tax invoice, the tax receipt, is properly structured because you need to know that if the prices are taxed, you need to have a little T beside it, and if it is zero-rated, then you would have a little Z beside it to know what is taxable and what is not."

Santiago Castillo, Jr., Director, Santiago Castillo Ltd.
"There are many grey areas, Jim, where they are not sure. Some vitamins will pay the GST, some don't, supplements, etc., etc. This thing just happened a month ago. The bugs need to be ironed out."

Caught in the middle, as usual, is the all important consumer, who's left bedevilled by the calculations reflecting the actual GST increase. And for a public not used to requesting a receipt at purchase, the task of keeping track of the lawbreakers is compounded by this behaviour.

Dr. Dennis Hoy, Consumer
"Some people look at their receipts very carefully. Others that don't have very much money anyway, don't pay any attention because it doesn't make any difference one way or the other. It's six of one and half a dozen of the other." Jim McFadzean
But do you find the receipts helpful?

Dr. Dennis Hoy
"The receipts are helpful to the government, because they are the ones collecting the taxes. It hardly does me any good. I can't get it off my income tax for sure. So what would be the use. Jim McFadzean
"This potted meat is one of the many items listed as zero rated and it is appearing on this list of Zero Rated Goods that is going to be provided to consumers by the GST office."

Aside from potted meat, the list of Zero Rated Goods include food items such as unprocessed and processed foods, some household and agriculture items. While some medicines appear on the list, vitamins, like rice, have entered a gray area for both enforcing agencies and retailer.

Luis Cho, Bureau of Standards
"Part of the problem is that the person that is selling, is selling above the control price, which is regulated by government. The regulated price is $105/100 lbs. but in some cases they are selling at a $107 and above that, and that is wrong."

Santiago Castillo, Jr.
"Right now for example one of our biggest suppliers sells us the 2lb rice, already pre-packed, pretty, ready to put on the shelf." Jim McFadzean
"And we are talking about locally produced rice?"

Santiago Castillo, Jr.
"Locally produced rice that we are buying from a local producer. We are buying that at $1.15/lb. and I showed the supplies people, my price this morning, my invoice. I am paying $1.15/lb for that rice. We have always known that that specific rice that comes pre-bagged is NOT controlled, only the bag one, the retail bulk one. That one costs us $1.15/lb because the bag costs us $2.30 which averages out to $1.15/lb. I can't sell it for $2.30 which would be $1.15/lb. We have to make a little profit on it. So we sell it for more than that. That is an issue that even they are not sure of."

So while the Bureau of Standards and GST collaborate in the difficult process of ironing out the bugs, Castillo says the Government of Belize is being cheated twice by those unscrupulous business establishments, which are under-representing their sales. The culprits are paying neither the business nor the GST tax. He says while it might be easier for the government to monitor and patrol larger outlets with more sophisticated technology in place, he believes there is an easy and straightforward formula to determine those medium and smaller businesses who are undermining the system.

Santiago Castillo, Jr.
"Government can easily take those that are paying their GST and say if a company of this size is paying their GST and is paying let's say for argument's sake, and we'll use a middle-sized company, Company ABC is paying $10,000 GST per month, how can a same middle-sized Company DEF only di pay $1,500 a month?"

Reporting for 7 News, I'm Jim McFadzean.

Consumers are reminded to request that a GST receipt be issued to them. The visits continue to other stores as well.